The benefits of technology – Chris Bruce, Thomsons Online Benefits

The last 14 years have been quite a journey for Chris Bruce, the affable managing director and co-founder of Thomsons Online Benefits. Back in 2000 he was a 25-year-old benefits consultant working out of a poky office in Victoria, London, who had teamed up with Michael Whitfield, then 40, the man with whom he shared a vision that benefits could be delivered online.

Today the company has 450 staff across offices in the UK, Singapore and Romania, an enviable client list that includes six of the 10 biggest tech companies in the world by market cap, including Microsoft and Cisco, and was valued 18 months ago at nearly £100m.

“Back then we were a couple of benefits consultants who thought that online software would revolutionise the workplace benefits market. People thought we were mad,” reflects Bruce as we walk through the company’s bright and buzzy SW1 offices. The premises put the philosophy of the organisation firmly in the face of staff and clients alike. Every wall is covered with motivational communication messages. The client meeting room, where ideas are kicked around, literally has a blue sky painted on the wall, while the art department walls are decorated with colour charts labelled with emotions, and the client wall carries plaques of the company’s hundreds of blue chip clients.

Bruce describes the company’s success as coming down to having had the right idea at the right time.

“We spent the first four years as a corporate adviser with a bit of software in the background, to prove the model. Then at the end of 2004 we raised a slug of cash to invest in the business to bring in a strong management team and really invest in the technology, and that was the point we really took off as a company.

“At that point we decided to scrap the software we had, and started building Darwin, and that is the software that our 150-strong development team are still working on today.”

One of Thomsons’ USPs has always been about offering companies with an international footprint the ability to manage everything from a single hub.

In 2003 the firm launched its first global client, across eight countries.

“Michael and I had discussed the potential of operating benefits across the globe. So we rebuilt on the principles of being able to work in a way that the benefits rules engine was agnostic to the way the benefits work. So when you go to Kazakhstan, you can configure benefits there in the way that is suitable,” he says.

The next big milestone was in 2007 when the firm won RBS as a client.

“RBS were one of the world’s largest bank and about to buy ABN Amro, so they wanted global software that would enable them to harmonise ABN Amro’s benefits. At that time we had 150 employees in the company and that enabled us to grow into a global software company.

“Our transformation has been we started life as a corporate adviser with a bit of technology. We are now entirely focused on being a high-growth global software company.”

When other offerings on the market are mentioned, be they auto-enrolment or benefits software or some of the innovations being brought to market by other intermediaries, such as workplace aggregation services that screenscrape data from multiple financial services and present it through a single portal, Bruce remains unimpressed.

“When I look at the UK market I see most bits of software haven’t been invested into and there is a lot of smoke and mirrors. I see it in auto-enrolment where people haven’t taken time to study what the market needs and we are seeing a lot of transitions from companies who thought they were buying an all singing, all dancing auto-enrolment solution and they haven’t.

“It is important that you have great administration and employee engagement software. Secondly you need software that easily integrates other tools into it. One of those tools for certain markets would be aggregation and screen-scraping tools. There are many other things that companies are looking for.”

Bruce says the firm is working on other propositions that are, in his words, revolutionary, but that he is unable to reveal details at this stage. All he can say at this stage is: “The innovations we have in the pipeline take the management information we have from Darwin and the personalization tools that we have in the software and the end to end integration we have with providers.

“But fundamentally the UK market is a smoke and mirrors market. But we don’t do that.”

So given the potential engagement possibilities of portals that bring an individual’s entire financial services portfolio into a single screen, will Thomsons not be targeting the area? 

“I think it is a brilliant concept, and I have seen a number of companies try to do it over the years – Alexander Forbes is one of them. In the US I have seen it working to greater effect. But in the US there is a software mentality to the way it is approached and there is more insight put into the date.

“There are also massive regulatory issues with it. I also think there are massive challenges between the employer and employee relationship. Even if you tell the employee that the employer won’t have access to the information, will the employee really feel that comfortable about it?

“And what happens with the information when the employee leaves the company? I love the concept, but I think there are more interesting ideas in the UK at the moment, which will have faster adoption in the market and make a much bigger impact for organisations.”

“Lloyds TSB have had a product around this. The banks have more firepower to deal with it. Where would I rather look to get this information, my bank or my employer?”

Bruce’s role involves executive strategy, which involves spending time with clients and partners around the world. His global travels have given him a broad perspective on benefits, with interesting perspectives on what works in different countries.

“If I look at Asia, one of the most innovative things is flexible spending accounts for healthcare. This is defined contribution medical benefit. We have technology offering that in Asia today.

“We are using it with one client in the UK, who are running it alongside their existing PMI. I can see it taking off as a disruptive approach to medical bills. So you give an employee an amount of money to spend on bills and the employee can choose how they spend it. That can be pure cash or a defined contribution component with an insured underpin. Most white collar companies would retain a DB underpin but use it as a way to contain medical costs

Bruce is excited by innovations in the US such as healthcare shopping tool app Castlight which recently floated and has seen its share price soar above the $1bn mark. Castlight is a kind of Tripadvisor for healthcare services, showing the user a list of specialists in their area, with reviews and up to the minute prices, making the unbundling of healthcare costs a genuine market that will drive efficiencies. Innovations like this, Bruce believes, will drive value in the benefits space.

“Possibly the most brilliant benefit I have seen is a company in India that gives its staff a water purification system, and each year it gives them more filters. What a brilliant benefit for their needs.”

For Bruce the post-auto-enrolment pensions market becomes all about engagement and education, as pensions becomes a commodity offered by every single employer.

“Commission going for the market is a really good thing. It will force a lot of innovation,” he says.

Asked whether he thinks this statement would be a surprise to those in the industry who have perceived Thomsons as a firm that has been commission-based in the past, Bruce says: “Those companies would be very out of touch with Thomsons as a business today. I think it is all about how you engage people with technology.

“Do people want to sit down and listen to someone talking about pensions, or do they want to watch a quick one-minute Youtube app or a really interactive tool.

“There has to be an understanding of how technology of what technology can do, and of the boundary of what can be done. So we sit on a huge amount of data. If we are giving a bit of information to an employee around what other people like them are doing with their benefits or around their pension, is that guidance, advice? The regulators really need to think about the changing role of software.” Thomsons does not, however, see the at-retirement guidance guarantee market as a key focus for it at present.

“Our biggest focus is on global multi-nationals and large UK employers that reduces manual inputting, provides an amazing user experience and gives people access to information their benefits around the world.”

And how does Bruce see the future for those corporate advisory firms that used to be his peers 14 years ago?

“I hope these guys know what their proposition is going to be. We have 450 employees in the company, we have cash in the bank and no debt. We have the financial firepower to take on this market,” he says, adding that in his view much of the corporate advisory space is in a state of flux.

“If you look at the insurance companies, they will invest in technology and that will work for smaller employers and then you have EBCs who don’t know what their strategy is and keep changing their mind about what they want to be. And then you have some smaller software providers and you wonder if they are making any money,” he says.

The question ‘how has it been working with the exuberant Michael Whitfield for the last 14 years’ extracts a huge laugh.

“I love working with him. He is a huge personality with huge opinions, but he is always open to being challenged. I was 25 when we set Thomsons up and he was 40, and he backed me to go into partnership together.”

At the time, Bruce was an employee benefit consultant dealing in corporates with Alexander Forbes, prior to which he was with Bruce and Partners, a medium-sized family corporate advisory business run by his father.

“He had me cold-calling trying to sell PMI to companies when I was 18. He is really proud of what we have achieved.”

With corporate benefits in his blood, Bruce may have had a head start on others in the industry. He certainly seems to have made the most of the opportunity.